Starbucks is making significant changes to its North American operations.
The coffee giant announced on Sept. 25 a $1 billion restructuring plan that includes closing stores and laying off hundreds of corporate employees, CNBC reports.
According to the outlet, about 900 non-retail employees will lose their jobs. This marks the second round of layoffs under CEO Brian Niccol, following the reduction of 1,100 corporate workers in February 2025, as AFROTECH™ previously reported.
Starbucks Closing Stores
Per CNBC, the number of company-operated stores in North America is expected to shrink by roughly 1% in fiscal year 2025. The plan could result in more than 500 Starbucks store closures across the U.S. and Canada, leaving 18,300 locations open, the outlet notes. CNBC reports that about $850 million of the $1 billion restructuring costs will be tied to store closures, with $150 million covering employee separation costs.
CEO Niccol emphasized the changes in a letter to employees, saying the company reviewed locations where it could not provide the expected customer and employee experience or where financial performance was lacking.
“These steps are necessary to build a better, stronger, and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers, and the communities we serve” he wrote, per CNBC.
The restructuring is part of a broader plan to invest in customers, boost operational efficiency, and reverse a six-quarter slump in same-store sales, according to CNBC. Baristas affected by Starbucks store closures will be offered transfers to nearby locations or severance packages, and Starbucks Workers United said it will engage in effects bargaining for impacted union locations, the outlet notes.
Niccol has also prioritized initiatives like the $500 million Green Apron Service investment to improve labor hours across company-owned cafes, a return to a four-day in-office schedule for certain employees, and updates to the executive team, as CNBC reports.
Per the outlet, following the announcement, Starbucks shares were down less than 1%, though the company’s stock has declined by more than 8% this year.
